How Effective are your RFP’s? (3 Key Indicators)

How Effective are your RFP’s and the three key indicators to measure to help you improve. That is the question and unfortunately many professionals do not have this question on our radars. We often roll them out the door not truly realizing how ineffective they are or how we may be wasting time by not achieving the desired result.

Request for Proposals (RFP) have become the go to purchasing or procurement form. They are on the rise because more and more companies are using them for all their procurement needs and project work period. Whether this is the right form they should be using for the present task at hand is another blog post altogether! In this post we are going to help you produce an effective RFP by providing 3 key indicators to measure when you issue a RFP. If you follow these steps it will help you produce the desired results using the least amount of resources.

To get right to the point, you will save time, money and energy if you focus your efforts on the content you include in your RFP. Increasing and including the correct content will improve its potential for success.

What determines the correct content and effectiveness of the RFP are identified in these 3 key indicators below:

  1. Clarification Requests – If you are spending time responding to tons of the same questions asked by more than one of the bidders then the correct content or scope of work was unclear. So, the first key indicator which will help you determine how effective your RFP is would be the number and types of questions your supplier’s are asking during the response period. Could you have provided this information as part of the original Statement of Work or maybe some of the other deliverables were not detailed enough.
  2. Vendor Responses – The actual number of quality vendor responses received is the second key indicator.  YES, responding to a RFP is expensive and vendors will put in the effort to provide a quality response if the deliverables are clear. A win for both parties.
  3. Competitive Quotations – The prices quoted by your vendors is the third and possibly the most important indicator and YES, this will be a factor. If your RFP content is clear, the quoted prices will reflect this. Removing unknowns will reduce project costs.
RFP Infographic

5 Steps from RFP to Award

Five key steps from when you issue a RFP to when you Award. The following RFP infographic provides a basic summary of the chain of events which often transpire when you are required to issue a request for proposal for a product or service. Some of these steps and the amount of time required to properly issue, evaluate and award a RFP are often underestimated. Hopefully, this graphic on the 5 steps on the RFP to Award process will provide some useful insight when it comes to the process.

RFP Infographic

5 Step Summary – FROM RFP TO AWARD

Step 1 – A need is identified and SOW provided

All companies, regardless of size, that are making the effort to issue a Request for Proposal (RFP) are doing so because they have a need for a product or service and are looking for proposals from qualified suppliers to assist with this need. This requirement typically comes with clearly defined specifications. With a Statement or Scope of Work defined the group should now collaborate on the development of the RFP.

Step 2 – Invite suppliers to your RFP

Identifying a list of competent and qualified suppliers to invite to bid on your RFP is often the most important part of the whole RFP process. Some companies prequalify suppliers prior to issuing the tender, some depend on experience or history from past projects, while others depend on recommendations from colleagues. Regardless, of how you put together your vendor list, this is not one area to short cut.

Step 3 – Question and clarification period

Important to remember that the more detailed your SOW is the fewer questions and clarifications will surface during the response period. The benefit of a detailed SOW is you will receive more accurate quotations as unknowns will not be factored into cost.Typically, three to four weeks is given for a RFP response depending on complexity and whether site visits are required.

Step 4 – Evaluation of responses

Okay, now you have all these proposals or responses from your bidders. What’s next? Some companies use what is called an evaluation matrix. In it, areas like commercial terms are scored and used to justify an award. Basically, you are reviewing proposals in depth and shortlisting the responses you feel are best suited to your project requirements.

Step 5 – Award

With your evaluation complete, you are now ready to issue an award. Some companies use an award letter and PO, while others use a letter of understanding (LOU) followed by a contract.  Remember to issue rejection letters to unsuccessful bidders. Contract monitoring and hopefully a successful completion to your project. This is a very basic overview and summary of the typical chain of events which occur when issuing a RFP. Check out our website for more details on buyer and supplier solutions like sample RFP’s, response letters and any other forms you might be searching for.

If you have found this information to be useful, please consider sharing this infographic on the 5 steps from RFP to an Award.



RFP for LTL Freight Services

RFP for LTL Freight Services:

truck_servicesSelecting a freight broker or transportation service provider is one of the most important decisions you will make for your organization.
Why? Because in the event orders are not delivered on-time you will have potentially lost a customer if you are a supplier and if you are a buyer you could be in for production delays which equate into profit loss. Like it or not freight shipping services can make or break your business and they are an integral part of the supply chain.

The Bureau of Transportation Statistics in the USA reported that the trucking and transportation market on a typical business day ships approximately 43 million tons of merchandise, valued at about $29 billion, moved almost 12 billion ton-miles on the nation’s interconnected transportation network.  These statistics imply the significance this industry sector has in regards to transporting our goods. In fact, if it is shutdown for any period it can cripple a country and your business.

Designing a request for proposal for Less than Truckload (LTL) services might include some of the following details: